The Middlemen

Vast numbers of foreign workers come to the United States with the help of labor brokers. These middlemen recruit them for temporary jobs. But Reuters found that brokers also can compound abuses workers face even before entering America.

NEW YORK – Nestor Molina has made a living looking for Honduran workers to pick fruit in Florida. Now, some of the workers he recruited, their lawyers, and the U.S. government are looking for him.

Molina, 53, is among the middlemen hired by companies to help bring foreign workers to the United States for temporary jobs.

The jobs span almost every industry, from agriculture to hospitality, and the numbers of foreign workers brought to the United States have swelled in the past two decades. In the fiscal year ending last August, the government issued more than 350,000 temporary work visas.

Public attention has focused largely on U.S. employers that exploit foreign workers. But Reuters identified an insidious problem that precedes and can compound the abuses workers face when they arrive in America – and one that authorities say can be even more difficult to address.

In more than 200 civil and criminal cases Reuters examined that were filed in federal court, lawyers representing the government and tens of thousands of foreign workers allege myriad misdeeds committed by middlemen such as Molina – labor brokers enlisted by U.S. companies to navigate government bureaucracy, recruit workers, help secure visas, and arrange transportation for those who are hired.

The alleged transgressions range from wage theft to human trafficking. Molina has been accused in a lawsuit by a group of Honduran migrant workers of charging them thousands of dollars apiece in illegal recruitment fees, among other abuses. U.S. authorities told Reuters they are investigating the allegations against Molina, whose whereabouts are unknown and who couldn’t be reached for comment.

One non-profit group that counsels American corporations on labor matters warns its clients that hiring intermediaries to recruit workers increases the likelihood of illicit activity within labor networks. In part, that’s because the brokers operate as independent contractors, essentially answering to no one.

“These brokers are outside anyone’s control,” said Quinn Kepes, a program director at the non-profit group Verite.

Anna Park, an attorney with the federal Equal Employment Opportunity Commission who has brought civil cases against brokers and employers on behalf of foreign workers, said the middlemen are hard to hold accountable if workers are exploited.

“These companies are fly-by-night. They are able to secure legitimate visas and operate within the system,” Park said. “When their practices are scrutinized, they often disappear and reinvent as a new company.”

The cases that Reuters examined dated from 2005 to 2015 and describe alleged abuses by labor brokers that began outside America’s borders – in Mexico, India, the Philippines and other countries where brokers recruit.

The cases illustrate how the absence of government oversight has allegedly enabled some brokers to exploit workers – and how intermediaries can insulate U.S. companies, providing them plausible deniability about the circumstances under which workers were recruited.

Efforts by Congress to tighten scrutiny of labor brokers during the past decade have failed to gain traction. In 2013, oversight measures passed the Senate as part of broader package of immigration reforms that later died in the House. The measures were opposed by the U.S. Chamber of Commerce, among others. It argued that adding regulations would do little to prevent wrongdoing and would prove cumbersome and costly for U.S. companies seeking foreign help.

But Randy Johnson, a vice president at the Chamber of Commerce, told Reuters that government oversight of foreign labor brokers is “an area that could use closer examination to get the facts straight and identify the true areas of problems so appropriate solutions can be crafted.”

Federal regulators with the U.S. State Department and the Department of Labor said they have increased oversight of brokers in recent years. But they lament that they have been unable to do more.

“Until we have the authority to hold U.S. employers accountable when they rely on unscrupulous labor recruiters, our ability to deal with these practices remains limited,” a Department of Labor spokesman said in a statement to Reuters.

Indeed, Reuters found that even if allegations of misconduct come to light, brokers such as Molina have continued to operate.

Last summer, in the largest labor trafficking settlement in U.S. history, Signal International agreed to pay around $20 million to 500 Indian workers brought to Louisiana to work for the marine services company. The settlement came after a federal jury in New Orleans determined that Signal and other defendants, including labor broker Malvern Burnett, engaged in labor trafficking, fraud, and racketeering.

Burnett, who declined to comment, initially contested the ruling but then reached a settlement in the case and dropped his appeal, according to court records.

Today, he continues to operate his New Orleans law firm. Among the services he offers: assistance securing temporary work visas.

BROKERS KEY TO HIRING

Brokers are active across a variety of visa programs that allow American companies to hire temporary foreign workers. Since the 2007 fiscal year, for instance, Reuters found that intermediaries were involved in helping secure visas for 80 percent of the 2 million foreign workers approved for agricultural and other low-skill jobs.

Some of those middlemen do little more than file government paperwork on behalf of U.S. employers. But Reuters found that many, such as Molina, play a hands-on role in recruiting the workers.

A former car salesman who has recruited workers from Central America, Molina told prospective clients in his promotional materials that he would “go the extra mile to meet your workforce needs.”

According to two lawsuits filed by Florida Legal Services Inc and Florida Rural Legal Services Inc in U.S. District Court in Florida, Molina did more than go the extra mile: The suits accuse him of illegally enriching himself at the expense of the workers he recruited.

In the civil suits, dozens of workers from Honduras say Molina charged them thousands of dollars in recruitment fees for jobs picking strawberries in Florida. Charging recruitment fees violates U.S. law, and workers involved in the lawsuits said they were instructed to say nothing of the payments during their visa interviews with U.S. consular agents.

Molina, the suits allege, promised that the workers would be paid well and that the jobs would lead to a benefit that was tantalizing but fictitious: permanent residency in the United States.

By the time workers realized the promises were hollow, they were deep in debt and scared to speak out, the suits allege. Molina and others working with him threatened to physically harm not only those who complained but also the families that the workers left behind in Honduras, according to the lawsuits.

If the allegations are true, Molina may have made more than $2 million in illegal recruitment fees. According to a spokeswoman for U.S. Immigration and Customs Enforcement, Molina is now under investigation by U.S. authorities for trafficking and forced labor. The spokeswoman declined to elaborate.

Criminal investigators, civil attorneys and Reuters have been unable to locate Molina. And despite the lawsuits and scrutiny, nothing bars Molina from continuing to work as a labor broker. Lawyers involved in the civil suit said that Molina secured visas for a group of Honduran workers as recently as November. Reuters could not corroborate the lawyers’ account.

The news agency also found that U.S. regulators do little to ensure that American employers — and the brokers that many of them use — follow through on the promises made to the workers.

In 2011, the Department of Labor began auditing companies that use foreign workers for agricultural and other low-skill jobs. The goal: to ensure that the jobs, pay and other working conditions are as claimed. Fewer than 15 percent of petitions for foreign workers were scrutinized each year, Reuters found. And even when audits were done, many were performed months after workers had already left the jobs.

Today, such audits no longer take place; Congress cut funding for them.

FALSE PROMISES

The cases Reuters collected and reviewed illuminate how brokers operate – and how regulators fail.

Cases that were resolved in favor of workers show that brokers have forced their foreign recruits to live in decrepit conditions, such as in a condemned hotel and trailers with no heat or running water. Middlemen charged workers illicit fees and misled them about the terms of their employment, whether salary, location or even industry. Other intermediaries operated through shell companies, apparently to help hide their schemes.

The suits that have involved Molina are unresolved.

Before 2009, when Molina first surfaced in government paperwork as a broker providing foreign workers for U.S. firms, he was mentioned in a half dozen police reports, Reuters found. The reports had nothing to do with recruiting foreign labor. But the accounts in some of the reports echo the accusations of some of the Honduran workers: that Molina has made threats of physical violence.

In one police report from May 1998, a girlfriend whom police described as having scrapes on her face and puffy eyes told authorities that Molina had beaten her. She later told police she would not testify against him because she feared he would attack her again.

In another police report, a Miami man was described by authorities as “in great fear” of Molina. On the day the 2001 police report was taken, authorities wrote that the man told them Molina had threatened him daily and told the man’s wife he was going to “beat her husband down to the ground then put his gun in the husband’s mouth and blow his head off.” Miami police could not say whether the matter was investigated further.

Molina’s associate at his labor broker company, All Nation Staffing, was a Florida man named Patrick Damian Burns, according to one of the lawsuits filed by the Honduran workers. Burns, Reuters found, is a felon who was sentenced to a year in prison in 1991 for intent to violate the RICO Act in connection with a bookmaking operation he helped run. The 49-year-old Burns was listed as a co-defendant in the lawsuit against Molina. Burns could not be located by the attorneys or by Reuters.

How Molina and Burns entered the labor broker business is unclear.

All Nation Staffing provided workers for at least two companies: Fancy Farms Inc and G&D Farms Inc, strawberry growers located in Florida.

Carl Grooms, owner of Fancy Farms, said he hired All Nation Staffing in 2013, the year the federal government gave Grooms approval to bring in 175 foreign workers for seasonal jobs picking strawberries.

Grooms said only that he had “learned about (Molina) on his website,” which has since been taken down.

In his promotional material, Molina offered to recruit the workers, help them secure visas, get them to the job site and even help oversee them.

“Our staff has helped many employers bring reliable, productive, documented workers,” Molina wrote in a company brochure.

G&D Farms, which received government approval in 2013 to bring in 512 foreign workers for strawberry picking, also hired All Nation Staffing, said Amber Maloney, who does marketing for the farm.

G&D had never used foreign workers before but turned to a labor broker after it found itself understaffed the previous season, Maloney said. She declined to comment on the farm’s experience with Molina and All Nation Staffing but said the farm has not used foreign workers since.

Andrew Jackson, a North Carolina attorney who files requests with the government on behalf of employers seeking temporary workers, said he spoke with Molina several years ago, when Molina was working for another Florida farm.

Each year, Jackson said, he is approached by aspiring labor brokers looking to connect with U.S. companies.

He remembered Molina as a polite man with dark hair and a colorful business card that featured a graphic of farm workers. “He must have made a good impression on those growers,” Jackson said.

“EVERYTHING WAS A LIE”

Four of the workers Molina recruited agreed to describe their experiences to Reuters if their names were not used. The experiences they described were consistent with those contained in the lawsuits.

The workers said Molina recruited in many of the poorest, most isolated parts of Honduras, and that some of the workers couldn’t read or write.

Molina employed a network of agents who helped spread word of job opportunities in the United States. Those who were interested were called to a series of meetings, where Molina explained what they could expect and how much each worker would need to pay. The price for a farm job was $4,000 plus travel expenses, a near fortune in Honduras, where the average per-capita annual income is $2,131, according to the United Nations.

According to the workers, Molina gave different reasons for the high fees. He told some of them that the money was a deposit in case they left the American job site; he told others that the money was a loan to keep the U.S. employer afloat. Still others were told that the money would open a path to legal residency in the United States. Many of the workers received assurances that they would be paid back at the end of their service, the workers told Reuters.

“He offered a lot of things, even that we would become residents. He offered us heaven and earth,” said one of the workers, who said he took out three loans from the bank, mortgaged some land and sold his motorcycle to raise the $4,000 to pay Molina. At the time, the worker said, he was earning $6 a day in central Honduras helping his father pick coffee. “All the promises sounded good,” he explained. “It was easy to fall for it.”

SCRIPTING THE INTERVIEW

To enter the United States, workers seeking visas need to be screened by consular officials. It’s one of the few forms of government scrutiny. But because so many visas are sought and granted, consular workers might spend no more than five minutes interviewing foreign workers before signing off.

The workers said Molina took no chances. To help them get through the interview, he taught workers to recite in unison, “WE HAVE NOT PAID ANYTHING TO GO TO THE UNITED STATES.”

Molina also warned them that anyone who tried to leave the job site would be deported; he said he had people in the United States who would be able to find them if they ran away, recounted one worker.

After they arrived at Fancy Farms and G&D Farms in Florida, the Honduran workers said their weekly checks amounted to $200-$300 per week — much less than what Molina had promised. And they said they could not get clear answers from Molina about when and how they would be repaid the recruitment fees.

“In the end it was just robbery,” one of the workers said.

Molina’s operation drew scrutiny after a worker got sick and turned to Florida attorneys who advocate on behalf of temporary foreign workers.

In 2014, after the strawberry picking season ended, the attorneys helped five Honduran workers file a lawsuit in U.S. District Court. Molina, Burns and All Nation Staffing were listed as defendants, accused of human trafficking and forced labor.

Molina’s partner, Burns, was based on the Fancy Farms property, according to owner Grooms. Molina would periodically stop by, threatening to deport or hurt anyone who complained, the workers interviewed by Reuters claimed.

After the lawsuit was filed, Molina and Burns could not be located, and the attorneys working on behalf of the Honduran workers dropped the case. In November, they filed a second lawsuit. This time, the defendant in the case is Fancy Farms, the company that hired Molina to supply workers.

Under federal regulations, employers that bring in foreign workers must sign contracts attesting that the brokers they use do not charge workers recruitment fees. Fancy Farms did not sign such a contract, according to the lawsuit.

The employer is accused of allowing workers to be charged exorbitant fees that brought their pay below the legal wages, a violation of the Fair Labor Standards Act.

Fancy Farms has not yet filed a response in court to the civil suit. An attorney representing the company told Reuters that “there is not much more Carl Grooms and Fancy Farms can say at this time.”

Filing lawsuits in U.S. court on behalf of temporary foreign workers is challenging. Workers often return to their home countries, fear getting involved with law enforcement, or are overwhelmed by language barriers, attorneys say.

Some of the 51 plaintiffs in the lawsuit against Fancy Farms have remained in the United States and are seeking special visas for victims of human trafficking. Karla Martinez, one of the attorneys in the case, said many of workers fear that Molina will harm them if they return to Honduras, which according to the United Nations has the highest murder rate in the world.

Their fears come amid evidence that Molina may still be operating out of Honduras.

In November, a group of Honduran workers arrived in the United States expecting farm work in Georgia that never materialized. The worker and his attorney said that Molina was involved in the recruitment. Reuters could not independently confirm Molina’s involvement.

A father of three, the worker told Reuters he first heard about the job possibility from a friend who had seen an advertisement that promised what he described as enticing opportunities.

The man said he was told that for a one-time fee of $4,000, he would be assured eight to 10 months of work every year for five years. The salary would be $1,600 per week, and housing would be free.

Best of all, at the end of those five years, he would be able to bring his family to America.

“They said your children will be able to study for free paid for by the American government and this was all under a legal program that had been established by Ronald Reagan,” the worked recalled.

To cover the $4,000 recruitment fee, and an additional $1,000 for travel, he took out a bank loan. With interest, he now owes about $8,000, he said.

When he arrived in Ft. Lauderdale, Florida last November, he said quickly realized he had been duped. He and other workers waited at the airport for hours for a bus to take them to their jobs, but no one came, he said.

“Everything was a lie. There was no job, no boss, no company. Nothing,” said the man. He is now working odd jobs in Florida, sometimes for no more than $100 a week, as he tries to figure out his legal options.

Molina’s one-time associate, Patrick Burns, may also have remained active as a labor broker.

On a Facebook page, someone who goes by that name is advertising a foreign labor broker business based in Tampa.

“If you have labor shortage on your farm and need quality help from Guatemala,” read the message re-posted by Patrick Burns, “please feel free to contact us…”

No one at the company, called H2A Labor Force Inc, has responded to messages left by Reuters.